ITV Has Turned Around Online Fortunes With VOD, Next Comes New News Site

UK commercial TV leader ITV (LSE: ITV) will launch a bold new news website this spring, will start trialling its delayed “Pay Player” this May or June and will renegotiate VOD contracts hard to gain more control, CEO Adam Crozier told City analysts whilst announcing 2011 results on Wednesday.

New news strategy

“In a few weeks, Crozier said. “The first site fully architected around a live stream of news from all our journalists around the country, be they regional or national. Online, news is not something we’ve really been in. Yet, at the BBC, 50 percent of their traffic starts with news.”

This will be yet another attempt at online news for ITV. ITV no longer has a live TV news channel, but tweets and such like allow it to inject a degree of live-ness online, under ITV News digital head Julian March, formerly of Sky News.

Pay Player trial

“The pay strategy is beginning to take shape. We are a little bit behind in terms of launching our pay mechanism online. There’s no issue with the pay mechanism itself, it’s just making sure that, when we put that in place on top of our systems, it’s stable and easy.”

ITV recently picked PayWizard to facilitate payments but details of the proposition are sketchy. So far, ITV is only pointing to its new archive distribution deals through Lovefilm and Netflix, which don’t really constitute a “Pay Player”.

ITV Player improvement

ITV’s online revenue grew 21 percent to £34 million through 2011 after ITV Player’s overhaul under digital director Robin Pembrooke, including its roll-out on to games consoles and mobile, brought a 44 percent jump in long-form video views to 376 million.

Mobile is the ITV platform being adopted most quickly, with the ITV Player app’s three million downloads since launch accounting for nine percent of the service’s viewing.

VOD deals

Distributors can expect a rough phase of renegotiation…

“Why is (online) revenue growth not as fast as audience growth?” Crozier said. “Partly because part of that audience comes through Virgin Media, where we don’t have any control. That deal runs out at the back end of this year, early next, so is something we have to sort out.

“Right at the end of the year, we signed new deals with Sky, Lovefilm and Netflix (NSDQ: NFLX). Sky is for archive and catch-up, Lovefilm and Netflix are just catch-up. All of them are non-exclusive, there are a number of conversations going on with different platforms. The key for us is maintaining control over the way our programmes are presented and keeping control of the revenue streams.”

Crozier singled out Virgin Media and BT (NYSE: BT) Vision contracts as due for renegotiation: “The biggest deal where we don’t monetise that is Virgin,” which nevertheless saw a 34 percent hike in VOD views. ITV Player online gets CPMs over £25, Crozier said.

YouView launch

Will the delayed UK IPTV JV make it in time for the Olympic Games?

“We are in test mode. It’s the first one fully designed from the start around VOD. The simplicity looks very impressive.” Launch “during the course of the summer”.

ITV spent £7 million in 2011 improving ITV Player and preparing for its Pay Player.